Page 120 - ELT_15th June 2020_VOL 372_Part 6th

798 EXCISE LAW TIMES [ Vol. 372

goods had crossed the customs frontiers. The goods are not cleared from
the customs till they are brought in India by crossing the customs frontiers.
When the goods are lying in the bonded warehouses, they are deemed to
have been kept outside the customs frontiers of the country and as stated
by the learned senior counsel appearing for the appellant, the appellant was
selling the goods from the duty free shops owned by it at Bengaluru Inter-
national Airport before the said goods had crossed the customs frontiers.
Thus, before the goods were imported in the country, they had been sold at
the duty free shops of the appellant.
18. In view of the aforestated factual position and in the light of the legal
position stated hereinabove, it is very clear that no tax on the sale or pur-
chase of goods can be imposed by any State when the transaction of sale or
purchase takes place in the course of import of goods into or export of the
goods out of the territory of India. Thus, if any transaction of sale or pur-
chase takes place when the goods are being imported in India or they are
being exported from India, no State can impose any tax thereon.
20. Upon perusal of the aforestated provision of Section 5 of the Central
Act, it is clear that a sale or purchase of goods shall be deemed to take place
in the course of import of the goods into the territory of India only if sale or
purchase takes place before the goods have crossed the customs frontiers of
India. Looking to the aforestated legal position, it cannot be disputed that
the goods sold at the duty free shops, owned by the appellant, would be
said to have been sold before the goods crossed the customs frontiers of In-
dia, as it is not in dispute that the duty free shops of the appellant situated
at the International Airport of Bengaluru are beyond the customs frontiers
of India i.e. they are not within the customs frontiers of India.
26. When any transaction takes place outside the customs frontiers of
India, the transaction would be said to have taken place outside India.
Though the transaction might take place within India but technically, look-
ing to the provisions of Section 2(11) of the Customs Act and Article 286 of
the Constitution, the said transaction would be said to have taken place
outside India. In other words, it cannot be said that the goods are imported
into the territory of India till the goods or the documents of title to the
goods are brought into India. Admittedly, in the instant case, the goods had
not been brought into the customs frontiers of India before the transaction
of sales had taken place and, therefore, in our opinion, the transactions had
taken place beyond or outside the Custom frontiers of India.”
The above observations of the Apex Court make it abundantly clear that
duty free shops at International airports are deemed to be outside India or be-
yond the geographical area-territory of India and therefore for all purposes they
are treated to be outside India.
10. The Division Bench of this Court at Nagpur in A-1 Cuisines (supra)
has taken similar position with respect to the duty free shops, which reads thus :
11. The Central Government has thus applied the ratio laid down by the
Hon’ble Supreme Court in Hotel Ashoka (supra) and correctly held that the
transactions effected at the duty free shops at the arrival or departure of the
International Airports in India located after the passenger clears immigra-
tion might have taken place within the geographical territory of India, but
for the purpose of levy of Customs Duties or any other taxes, the area of
duty free shops shall be deemed to be the area beyond the customs frontiers
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